Reaching Into Mud Puddles

Dan Guttman on the Tibet side of the approach to Mount Everest. Photo by Nancy Brockman

Dan Guttman has spent decades using discovery and dogged research to peer into government and industry secrets. He has found out how the U.S. environmental operating system really works, and achieved real improvements. Now he is helping students in China and the United States learn how to translate between — and improve — their respective OSs

It’s hard to define Dan Guttman. “He is part lawyer, part historian, part gumshoe investigator,” according to Government Executive magazine. He can’t really define himself. “I never decided that environment would be the backbone of my career,” Guttman emailed me, briefly in between flights from China to Washington and back. Since 2004, when he began a two-year Fulbright scholarship in Shanghai, he has been working with colleagues in China and the United States in the development of educational programs on the environment, law, and public policy management.

Guttman continued his biographical selfie: “If there has been a theme to my work, it has been learning about how people with limited means can use knowledge and law to effect change and to account for those in power.” For more than three decades, he did just that, exposing corruption, malfeasance, and danger to American workers and citizens from the legal and environmental externalities of industrialization and from the evolving obscurity of related governmental actions. Now he uses that experience while teaching at and working with colleagues in universities in China.

Asked to describe his environmental awakening, Guttman told a story. “During a walking safari along the Luangwa River in Zambia, we came across a dry river bed. But there was a puddle in the mud, maybe four feet wide. Our local guides stuck their hands in, and came out with a huge fish — which seemed to be as big as the puddle.” Life is everywhere, surviving where it seems impossible, Guttman realized. However, the event also is a metaphor for his career, which has been an ever-evolving exploration of what can be found in the muddy puddles left behind by business decisionmaking and governmental policymaking.

A poor student in high school, Guttman had political awakenings in college amidst the anti-Vietnam war and civil rights movements. “As editor of the student paper I found my candy store: the license to go out and ask questions of people at the top, as well as at the bottom and in between. When my tenure was up, as student body president I found myself in the middle of a successful student strike.” The university president was compelled to reinstate students expelled following a sit-in to protest recruiters from Dow Chemical, the maker of napalm. “This was a first experience in the unexpectedness, swiftness, and, for better or worse, power of group action.”

Starting law school at Yale in 1968, amid student protests and following the two assassinations the previous spring, Guttman found himself asking how the people in power were doing so poorly. “This was what I wanted to find out about — how did the so-called best and brightest, the social science experts schooled at fancy places, use their knowledge in the service of power?” Then he was electrified by a speech Ralph Nader gave to the law students. Guttman became a Nader’s Raider and began an analysis of that power with fellow Raider Barry Willner. What started as a study of think tanks turned into the discovery that since the mid 20th century much of the core work of the U.S. government was being done by private contractors — management consultants like McKinsey and Booz Allen, think tanks like the Rand Corporation and Mitre Corporation, and other self-professed experts.

“The Constitution and all these statutes are directed at protecting us against the abuse of power by government actors,” Guttman once told a reporter. “Well, what happens when private contractors, who aren’t covered by these laws, do much of the government’s work?” When the study was published as a book in 1976, The Shadow Government was called “pioneering research” and an “important study of a national scandal” in two different New York Times reviews.

At the start of his career, “My questions focused on how things work and not the environment as such,” Guttman says today. “But, at each step, a portion of the world of environmental governance came into view.” In 1974, he went to work at Spiegel & McDiarmid, a young law firm founded by George Spiegel, “an American original who, with a band of colleagues, local officials, and citizens, and help from the Department of Justice, were taking on the electric power industry,” Guttman says. “If there is such a thing in law, George was a genius. George’s teachings included the small — ‘If you want to hide something from a lawyer, put it in a statute’ — to the fundamental. Knowing the law and the facts are essential, but not enough.”

Opposing electric utilities and oil companies, Guttman had to learn how to deal with opponents who are powerful, have money, and question your ethics — indeed threaten sanctions for proceeding with a case. “Law school did not teach the psychology and ethics of being on the opposite side from power,” he says. “These were things I learned, often as a fly on the wall, listening to Spiegel & McDiarmid mentors debate and address what seemed like career-threatening intimidation from companies, law firms, and, sometimes, judges.”

As Guttman explains it, in the late 20th century, hundreds of small, municipally owned electric systems were dying on the vine because of inability to engage in economies through coordinated electric power supply. Large investor-owned utilities denied the cities access to their transmission grids, on the premise that they (as regulated monopolies) were immune from antitrust laws. “George saw this was not so. Representing groups of municipal electric systems throughout the U.S., we intervened in federal agency proceedings where utilities sought rate increases or other benefits. George pointed out that ‘public interest’ tests in relevant statutes compelled agencies to consider evidence of anticompetitive conduct. When the agencies ignored the cities, we went to appeals courts and the Supreme Court, winning decisions that provided a bill of rights for electric industry competition.”

As rights were obtained, the firm worked with cities to push for entrance into transmission and power pooling that had been the investor-utility preserves. “As I look back, in fighting monopoly power on behalf of citizens, and in the name of efficiencies, George and colleagues pioneered in pushing into law and practice concepts of power pooling and open transmission that are the pediments of today’s smart grid.”

Through this litigation, “I came to see the right to court discovery as a distinguishing feature of our system — an equalizer through which citizens learn things unknown to government, CEOs, and the media.” The mud-puddle metaphor holds here. Representing Florida municipalities during the 1978 nationwide natural gas shortage, he found himself doing his first ever cross examination. The witness was Ken Lay, then a Florida Gas official who would use the company as a springboard for what later became Enron.

“Lay’s testimony was flatly contrary to discovery documents showing that the alleged Florida shortage was the result of conspiracy among the gas company and oil companies, through which gas contractually obligated to the cities was sold at higher and unregulated prices on the intrastate markets.” The discovery documents led to the Federal Power Commission’s consideration of referral to the Department of Justice. The gas company (and Amoco) quickly settled the case.

In 1979, Guttman took a leave of absence from the firm to follow his muse in government service. Newly elected Senator David Pryor (D-Arkansas) became interested in contractors who do the work of agencies and soon found out that Guttman, as an author of The Shadow Government, was the leading expert. Pryor asked him to serve as special counsel in oversight investigations and hearings. “We studied the Department of Energy and the Environmental Protection Agency,” Guttman says today. “We saw that much of their activities were delegated to invisible private contractors, too often with conflicts of interest unexamined by officials.” To Guttman, the experience demonstrated the usefulness and power of congressional oversight. It was just a few years after the OPEC oil embargo that had brought America to its knees. “We discovered that in planning for another embargo, DOE called on a contractor that, unbeknownst to DOE, was doing oil planning for OPEC countries.”

In 1989, when Guttman did a second stint in the Senate with Pryor’s committee, foreign policy focused on Japan’s economic power. DOE hired a contractor to steer a highly controversial shipment of plutonium to Japan through bipartisan congressional opposition. “We found that, again unknown to DOE, the contractor was simultaneously reporting back on its work for the U.S. government — including its dealing with Congress — to Japan’s electric utility beneficiaries.” Columnist Andy Rooney wrote a humorous article on hearings led by Pryor, in which he described “Dan Guttman, a bright young lawyer who apparently hasn’t combed his hair this year but is otherwise hard to find fault with. Guttman asked many of the most penetrating questions himself, and [the DOE official he was grilling] was often unable to reply at all.”

In between his stints with Pryor, Guttman and his brother, Reuben, a labor lawyer, accidentally came to represent workers in an event yielding another serendipitous entry into environmental law. As Guttman explains today, “The workers we came to represent — janitors and oil, chemical, and atomic workers — see environmental problems that governments, the press, and top corporate officials don’t see. They are the proverbial ‘canaries.’ U.S. labor law is weak. But threats to worker health and safety are also threats to community health and safety. So, on behalf of workers, and working with environmental NGOs, we began to use, and make, environmental law.”

As school buildings aged, janitors were the first exposed to friable (flaking) asbestos. On behalf of the Service Employees International Union, he teamed with Robert Percival and the Environmental Defense Fund to bring a successful lawsuit against the Reagan administration’s EPA. “The case,” Guttman recalls, “was the first use of the citizen petition provision of the Toxic Substances Control Act, which provides for de novo U.S. district court review.”

Peering into a mud puddle, court discovery showed that EPA staff’s draft responses had granted their petition. Then, following a note from EPA’s deputy administrator that said, “Don’t piss off OMB,” the petition was denied. “We took the documents to Congress. Following hearings, with bipartisan agreement and speed that seems impossible today, they enacted
the 1986 Asbestos Hazard Emergency Response Act, which required EPA to engage in a rulemaking on asbestos in schools. Following perhaps the agency’s first use of negotiated rulemaking, the workers joined EPA to support the regulations against unsuccessful asbestos industry appeal.”

In the early 1990s, through further serendipity, the two brothers came to represent the workers who operate the U.S. nuclear weapons complex. Guttman had been asked by Nye County, Nevada, the locale for the proposed Yucca Mountain nuclear waste site, to help advise it based on his knowledge of the Department of Energy. “We organized a workshop and a guy named Richard Miller called. He was an assistant to the president of the Oil, Chemical, and Atomics Workers, which represented DOE contractor employees who were the backbone of the weapons-complex workforce. Richard asked if I wanted to help the union in its dealings with DOE and its contractors.”

The workers had little recourse under labor laws, but knew how government and its contractors had created hazards, and how sums spent to address them were too often making them worse. Could they invoke laws other than labor law? Indeed they could.

In a series of lawsuits, OCAW, represented by the Guttman brothers, drew on environmental law to successfully take on the nuclear weapons complex, and, ultimately, obtain in 2000 bipartisan congressional enactment of a law to compensate those of the 500,000 weapons workers sickened through government and contractor negligence. Once again, court discovery uncovered facts not known to top corporate and government officials. “When Fluor Daniel, the engineering firm operating DOE’s Fernald, Ohio, site, sought to replace OCAW workers who knew the hazards, discovery revealed, unbeknownst to top DOE officials, Fluor was doing cost-benefit analysis of whether to comply with the Occupational Safety and Health Act.”

According to Guttman, Fluor told the court that workers would be protected by a DOE approved health and safety plan. “But Richard Miller appeared to be the only one who had ever read the plan.” To DOE’s embarrassment, the plan stated that workers were not to volunteer health and safety information to government inspectors. On receipt of these documents, a House oversight committee invited embarrassed DOE and Fluor officials to testify. As a result, Fluor’s senior site official was terminated, DOE agreed to changes in its management, and the case was settled.

The litigation against DOE on behalf of workers led to Guttman’s being asked to serve as executive director of a presidential advisory committee to do independent inquiry into press revelations that during the Cold War the government performed human radiation experiments on unwitting citizens. The committee, composed of biomedical and radiation science, bioethics, law, history,
and data experts, analyzed and made public hundreds of thousands of documents, many from classified files held by the Pentagon and the nuclear weapons complex. At the same time, the committee conducted 30 days of public hearings and reviewed ongoing human subject research.

The report to President Bill Clinton told the story of what had gone wrong, with recommendations to address lessons learned, particularly about the relationship between government and contractor secret-keeping and citizen exposure to risk. “As with the work with Senator Pryor and the value of congressional oversight, this was an education in the value of citizen inquiry, conducted independently yet in cooperation with agency officials,” Guttman says today.

In 1996, Vice President Al Gore announced a quarter-billion-dollar deal by which contractors would remove nuclear waste from the Oak Ridge laboratory and recycle the material for unrestricted commercial use. “The nuclear workers saw the administration’s supposed ‘win-win’ as an effort to bust the union,” Guttman remembers, “and also, in replacing experienced workers, an invitation to environmental disaster without environmental review.” When the Clinton administration refused to listen, the workers went to court, with the Guttman brothers and Barbara Finamore of the Natural Resources Defense Council as co-counsel. “Here, again, discovery revealed facts seemingly unknown to highest-level officials,” Guttman says.

In 1999, Judge Gladys Kessler held that Section 113(h) of Superfund barred standing for the plaintiffs, but proceeded to state that they had unearthed “ample evidence that the proposed recycling significantly affects the quality of the human environment.” The judge confirmed that “no national standard exists” for the core recycling work. The result, she explained, “Is no oversight by any federal regulatory agencies.” The judge termed “startling and worrisome” the absence of opportunity for “public scrutiny or input on a matter of such grave importance.” DOE Secretary Bill Richardson declared a moratorium on the recycling.

Guttman and colleagues began to use whistleblower law, for fraud against the military, but also violation of natural resource regulations, recovering hundreds of millions for the U.S. government from oil companies who cheated on royalty obligations. In addition, the Oak Ridge nuclear waste recycling case led to the use of whistleblower law to protect against environmental harm. “And I was the whistleblower,” Guttman adds. Following the DOE recycling moratorium, the Nuclear Regulatory Commission proceeded with rulemaking to permit recycling. “In October 1999, I went to testify at the NRC’s public hearing. I was shocked to discover from the draft rules made available that the NRC had turned over rule drafting to SAIC, one of the very DOE recycling contractors that, as Judge Kessler had found, had already made a mess of it.”

Through his work on contracting, Guttman knew conflict-of-interest rules required SAIC to disclose its relevant interests. “I assumed SAIC had done so and that NRC had cynically hired the contractors without regard to conflicts. When I began to express my disgust in testimony, I was stunned to learn that NRC staff had no clue of the contractor’s further interests or Judge Kessler’s decision.” Much to his surprise, in December 1999, NRC terminated the contract.

Then the Department of Justice brought a False Claims Act case against SAIC for failure to disclose its conflicts. “In court I testified as a government witness, a first and humbling experience.” The jury found SAIC had made dozens of false statements to the NRC. Following a 2010 ruling on SAIC’s appeal, the case was settled with contractor payment to the government. In its 2016 decision in Universal Health Services, Inc. v. Escobar, the Supreme Court confirmed the SAIC case’s core principle: government contractors can commit fraud under the False Claims Act by failing to disclose
conflicts of interest.

As Government Executive wrote, Guttman “helped set the parameters” for debate over contractor use. In a 1983 decision, the Fifth Circuit had cited The Shadow Government for the proposition that while EPA may use contractors, “an agency may not delegate its public duties to private entities,” particularly if there may be a conflict of interest. Following the 1989 Pryor hearings, the White House reviewed and altered its policy on what work can be done by contractors, to reserve to agency personnel “inherently governmental” functions and to require conflict-of-interest disclosures. EPA also undertook to revise its contractor conflict rules. “However, the fundamental problem remains,” Guttman says today. “Despite law and policy, because of continued caps on Civil Service hiring, contractors not subject to ethics, pay, and open information rules that apply to agency officials continue to do much basic work, including environmental work, too often beyond official oversight capacity and public view.”

Reprinted by permission from The Environmental Forum®, March/April 2017